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After the Wirecard case, they demand the approval of the fintech sandpit in Spain

July 6, 2020

The bankruptcy of the German Wirecard has shown that the coincidences in the Spanish financial sector require regulation of fintech and approval of the sandpit. This was reported on July 3 in the Invertia supplement from El Español.

The Invertia article, signed by José Manuel Del Puerto, says The fintech sector could be the “spearhead” of the economic recovery after the corona virus, but “the regulatory project threatens to continue to accumulate delays”.

Del Puerto wrote: “From the very first moment when Wirecard accounts were blown up, Many were the voices pointing to the lack of regulation in the fintech sector. Although the case of the German is special because he has a banking license in his country of origin, there are in fact many voices that have bluntly pointed out the lack of specific regulation from the more traditional sector of the sector. “.

After the Wirecard case, they demand the approval of the fintech sandpit in SpainAfter the Wirecard case, they demand the approval of the fintech sandpit in Spain

The publication also cited the president of the Spanish Association for Fintech and Insurtech (AEFI). Rodrigo Garcia de la Cruz, WHO He said, “The sandpit is looking hard for these things not to happen, so this should be an accelerator for its approval.” While aware that “the possibility of fraud will always exist in all sectors”, he is convinced that this soft legal framework “will significantly limit this risk”.

According to the article, García de la Cruz believes that the financial technology sector is aware of the reputation damage that the Wirecard case is causing.

“The appearance of an article entitled” Wirecard’s bankruptcy is a warning to fintech investors “in the past few days by none other than the Wall Street Journal recognizes the impact that this case can have on the entire industry in a way that is agile and vigorous Measures are taken, something that, as is repeated in the Spanish case, only escapes the approval of the sandpit, which has been delayed by more than two years since the first project led by ex-Minister Román Escolano “, Del Puerto said in his article.

Preliminary project and challenges

The Spanish Association of Fintech and Insurtech (AEFI), sponsor of the sandbox for financial technology companies, was satisfied with the approval of a preliminary project to create the sandbox mentioned above. In addition, they have identified a number of challenges from this organization that they will face in the parliamentary process after their final approval. This was reported in February by Cointelegraph in Spanish.

For AEFI, the implementation of the sandbox will enable Spain to be at the forefront of financial technology innovation. With an explanation on this occasion, they remembered: “The Council of Ministers approved the draft law to create the sandbox, a controlled and unregulated test room that will favor job creation, competitiveness and technological development. The project (…) creates a legal environment that guarantees that the financial innovation process is carried out efficiently and safely for users.“”

They also identified a number of challenges from AEFI that the Spanish sandbox must face in the parliamentary process once it has been finally approved:

  • A quick process to start as soon as possible and a clear commitment to the proportionality criterion and the principle of equal treatment for companies.

  • The mobilization of the necessary resources by public institutions and the other actors involved, especially with regard to prepared and qualified personnel in the responsible organizations; namely Tesoro, CNMV, Banco de España and DGSFP for the correct implementation of the sandbox project.

  • An implantation with ambitions that would enable Spain to become one of the leading countries in the field of fintech regulation and to promote the attraction and promotion of national and international talent.

  • Collaboration between all players in the industry to facilitate investment in fintech, as the project shows that financial institutions and venture capital can invest in and work with startups.

  • Avoid escaping talent into other regulated spaces that have already been created in different countries.

  • A call to all companies in the financial sector to present their innovative sandbox project.

How would the sandbox work?

It would identify a number of projects that improve the delivery of financial services, with surveillance protocols that all parties are aware of. Innovative companies or projects that are in the mature phase (sufficiently advanced and demonstrate that they offer added value in aspects such as improving legal compliance and customer protection, increasing efficiency or improving quality in the provision of financial services ) could operate under the exceptional modality, in the case of activities that can be placed under the umbrella of the regulatory authority under the applicable rules, or under the non-submission modality for the yet unregulated activities for its innovative character.

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